Question
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):
Sales | $ | 70,000 |
Variable expenses | 38,500 | |
Contribution margin | 31,500 | |
Fixed expenses | 23,310 | |
Net operating income | $ | 8,190 |
10. How many units must be sold to achieve a target profit of $18,900?
11. What is the margin of safety in dollars? What is the margin of safety percentage?
12. What is the degree of operating leverage? (Round your answer to 2 decimal places.)
13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.)
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